Tug-of-War over Federal Lands

The Hammonds case in eastern Oregon is the result of a political tug-of-war between ranchers and environmentalists. Congress’ willingness to cater to whichever happens to be most politically powerful has left public land management in a shambles and subject to repeated disputes like this one.

Two acts of Congress, one passed in 1978 and one in 2000, played hidden but key roles in the Hammonds’ case. The Public Range Improvement Act (PRIA) of 1978 was passed at the behest of ranchers, but ultimately it may have worked against them. The Steens Mountain Cooperative Management and Protection Act of 2000 was passed in response to environmental lobbying, and it probably generated much of the Hammonds’ hostility to the federal government.

When the Forest Service and later the Grazing Service (forerunner of the BLM) started regulating grazing, they established rules that were similar to rules the ranchers themselves had developed years before the agencies were created. These rules were much like those for mining and water, and included first-in-time, first-in-right and use-it-or-lose-it.

First-in-time, first-in-right meant that ranchers didn’t compete for individual grazing allotments, so the agencies couldn’t use bidding to help determine market values for grazing. Use-it-or-lose-it meant ranchers couldn’t sell their grazing rights. If they tried to sell them to someone else, or even stopped using them to allow the land to recover, they would lose the right to use them to some other rancher. Since the value of grazing on federal lands was incorporated into the value of a ranch when it was sold, ranchers would generally not do anything that would risk that value.

Since there was no bidding, the BLM and Forest Service initially tried to base fees on market values estimated from the fees charged by nearby landowners. Such fees might differ from state to state and even in different parts of the state. In 1968, the average fee was about 56 cents per animal unit month (the amount of forage consumed by a cow and a calf in a month), which is around $4 in today’s money.

The 1978 law defined a single formula for calculating fees for all Forest Service and BLM lands in the country. Being written by ranchers, the formula took into account livestock values and ranch costs but ignored costs to the taxpayers. The law also dedicated half the fees to range improvements, effectively spending the ranchers’ money on things that would increase grazing production and thereby reducing returns to the Treasury still further.

Initially, the fee was $2.31. But it quickly declined to $1.35 (the lowest the formula would allow) and has been there in most years since that time. That means it is declining after adjusting for inflation and today is about a third of the 1968 fee. At the time the formula was written, analysts predicted that per capita consumption of beef would rise, and along with it the fee; in fact, consumption has declined, and under the formula, fees therefore declined as well. Thus, vegetarians subsidize continued beef production despite declining demand.

Ranching advocates argue that the grazing fee is set correctly because it costs more to graze livestock on federal land than on state or private land. But the BLM and Forest Service represent the sellers, not the buyers, and the price they set should reflect the amount that a seller is willing to accept. Except in cases of charity, no seller would permanently accept less than cost, and costs currently average about $10 per animal unit month.

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The Steens Mountain Act of 2000 created a 176,000 acre wilderness and created a forum in which ranchers, environmentalists, and agency officials negotiated a management plan for that land–the “cooperative management” part of the law. They eventually agreed to close nearly 100,000 acres of land to livestock grazing. In exchange, the BLM gave ranchers land elsewhere, meaning the taxpayers still end up footing the bill. All of the ranchers in the area went along with the plan except the Hammonds.

The Hammonds’ refusal to accept the exchange probably sealed their fate more than anything else. Lots of ranchers have set fires that accidentally lapped over onto federal land, but since the land they were burning was probably within their grazing allotment, no one cared about those cases. But BLM officials resented the Hammonds’ uncooperative attitude far more than they cared about a few acres of grassland fire.

According to court records, the Hammonds put out the 2001 fire that burned 139 federal acres themselves and the federal government spent $15,000 containing the 2006 fire that burned just one federal acre. For that, the feds demanded a $1 million fine from the Hammonds, of which the court awarded $400,000 with the proviso that, if the Hammond’s had to sell any of their land to pay the fine, the government would get first right of refusal to buy it.

Due to their felony conviction, the BLM has also cancelled the Hammonds’ grazing permit, thus taking cattle off of more acres in the new Steens Mountain Wilderness. Thus, the Hammonds have lost everything they were trying to protect. It is impossible to know how much of that loss was because of the fire, how much was because of their cantankerous nature, and how much was because the feds wanted to kick them off the land, but it seems likely that the last reason played at least some role.

While I remain convinced the Hammonds’ fines and prison sentences were unjust, my guess is that if these lands were managed economically, rather than politically, the Hammonds wouldn’t be there anyway. The best pasture lands can sustain about one head of cattle per acre. The federal government allows about 14.6 million animal unit months, or about 1.2 million animal years, on some 240 million acres of land each year. This is the equivalent of about 200 acres per head, suggesting that these lands are extremely marginal for livestock.

Despite this huge acreage of federal land open for grazing, federal lands provide only about 2 percent of the nation’s livestock feed, and less than 4 percent of cattle or sheep grown in this country ever step foot on federal lands. Depending on where you live, if you live in an urban area and eat beef, chances range from slim to none that the animal the meat came from spent any time on federal lands.

What this means is that, if the agencies were to charge true fair market value, including a price sufficient to cover their costs, many ranchers would simply seek alternative sources of feed. Of course, if the agencies were funded out of user fees rather than tax dollars, they would have incentives to reduce their costs. But even with a 50 percent reduction, the resulting fee would be nearly quadruple current fees and many ranchers would stop using the land.

Funding the agencies out of user fees would also change the calculus for environmentalists. Rather than out-lobby the ranchers in DC, they could reduce livestock grazing by outbidding them. In actual practice, they might find it more efficient in some cases to pay ranchers to find an alternate source of feed, and in other cases to negotiate reductions in grazing where some grazing could take place without harming native wildlife or other values. Whatever the outcome, a user-fee-driven system would avoid the disputes we have seen in Oregon, Nevada, and elsewhere.